The I Bond Thread

[Accidental Retiree]

I didn't see "this is a gift" in the review page.
I did wrong, I don't know where I did wrong, that's going to be a problem.
Got 2 emails from TD this morning on over purchase for the year, but there are really meant for the gifts for 2023 and 2024.

I will need to re-purchase the gifts, but I have to figure out where I did wrong first. I followed the procedure by Harry Sits website - 3 radio boxes, pick the beneficiary, then filling in spouse name as primary, then my name as secondary, then check the gift box, its done. But the review page didn't say "this is gift"

I’m guessing the review page didn’t show “this is a gift” because you created a new registration for the 2nd gift rather than use the drop-down registration you’d already created for the first gift purchase.

The new registration (for 2024) may be where you went wrong.

When we made the 2nd gift purchase, we used the drop down registration we’d created for the previous gift. Then when it was time to review, we saw “This is a gift” on the review page.

 

[Accidental Retiree]

We have completed our gift purchasing to each other for the years 2023, 2024, 2025.

I feel this is as far into the future as we can go fairly safely..

We’ve done this, too. We will still have the opportunity to purchase for our trust in upcoming years, but I think we’re set on the gift box purchases.

 

[wmc1000]

I am wondering if what the prevalent thought is regarding interest reporting? We were thinking accrual method might be more advantageous for us since our fed tax situation is lower before we would get to the RMD years which depending on I Bond future rates might coincide with their redemption.

What are others here doing or thinking of doing with regard to interest reporting on their I Bond purchases?

 

[Eucerin]

I think I have figured out where I did wrong.
After I "add new registration", enter all the necessary info and check the "gift" box, and "submit"; then the page led me back to "BuyDirect" tab, in the dropdown, I need to select "SpousePODme", then filling out the 10k, then "submit". The previous page did show "this is a gift".
The "BuyDirect" page dropdown defaults under me, I need to manually select "SpousePODme" to make the gift
I did two gifts today, if no error emails coming in, I will do two more tomorrow for spouse

 

[Sunset]

I am wondering if what the prevalent thought is regarding interest reporting? We were thinking accrual method might be more advantageous for us since our fed tax situation is lower before we would get to the RMD years which depending on I Bond future rates might coincide with their redemption.

What are others here doing or thinking of doing with regard to interest reporting on their I Bond purchases?

We are just going to report it as we cash it. As it's simpler.

I also couldn't see how to easily track and prove the yearly interest already claimed when cashing time comes.

We won't really have too much difference in income when RMD's hit, as we do Roth conversions every year.

We have quite a few years to wait until RMD's , which last I looked I think they are pushed out to age 72 (?), buy then inflation better be a lot smaller and our I-bonds cashed or we will worry more about food bank locations than taxes

 

[Dash man]

We’re going to pay taxes the year we cash them in too. We’re doing large Roth conversions now to avoid significant RMDs when we turn 72, trying to complete the conversions before TCJA sunsets in 2026. We want to minimize taxes when older so one of us won’t be heavily penalized filing single. Cashing in iBonds after that won’t effect us much tax wise.

 

[Jerry1]

I Bond Question

I’m going to buy some I Bonds through Treasury Direct. I’m wondering if both me and DW have to set up different accounts for both of us to buy $10K or is there a joint account function. In reading, I could find that there’s a joint account option, but I couldn’t ascertain if that account would be limited to the $10K or if we could both get $10K for the full $20K we’re able to purchase.

 

[Gumby]

You will each need a Treasury Direct account of your own, but you can fund both from a joint bank account.

 

[zaqxsw]

And you can register each other so they are joint at:

https://www.treasurydirect.gov/indiv/help/TDHelp/howdoi.htm#addsecondary

 

[Jerry1]

Thanks!

 

[Sunset]

Or you can buy them individually and set the beneficiary to each other POD.

We did it this way for both the bonds and for the gift bonds (which we will leave in the gift box for now, and it's basically a way around the $10K limit at today's GREAT rates.)

 

[Jerry1]

Or you can buy them individually and set the beneficiary to each other POD.

We did it this way for both the bonds and for the gift bonds (which we will leave in the gift box for now, and it's basically a way around the $10K limit at today's GREAT rates.)

This is a good point. What is the best way to set up the beneficiary? I probably would have thought to have our trust in there some how.


Not sure I understand the gift work around. Can we each gift $10K to each other? That would just be for discussion because at this point, I just want to get set up and lock in my $10K each. Doing much more would make me have to think about selling something and that’s not something I want to do right now (lock in some losses).

 

[Sunset]

DW and I each bought $10K this year, each of us is the registrant with POD to the other.

We then added a new registrant each which is the other person and beneficiary being ourself. So I added DW as owner and myself as beneficiary, and clicked on "gift" checkbox near the bottom.

Then we each bought three $10K gifts for the other person (so $60K in total). These gifts start earning interest and the 1 year holding period immediately. We had a bunch of cash sitting in the bank earning 0.5% so it was easy for us.

I personally think buying one $10K gift is a sure bet right now as it will be cash-able next year and will have earned ~800 interest even if inflation goes to zero.

We are being hopeful and aggressive by purchasing 3 years worth of gifts, as only 1 gift per year can be redeemed (given and then cashed). So if rates/inflation drops to zero, the third gift will end up being a small total 3 year return of ~800 which is 2.67% averaged out. Still better than all/most 3 year returns and fully safe (unless USA gov't collapses).

 

[MJ]

Problem with website

This Monday, I had no problem getting myself and my wife $10K each as owner and gift. I decided today to get an additional $10K gift for each other. I tried twice and was unable to complete the transaction. Every step took up to a minute. After the 3rd or 4th step, after waiting over a minute, their site just said they are unavailable, try again later. I wouldn't mind if this happened before starting their archaic login.

 

[Eucerin]

This Monday, I had no problem getting myself and my wife $10K each as owner and gift. I decided today to get an additional $10K gift for each other. I tried twice and was unable to complete the transaction. Every step took up to a minute. After the 3rd or 4th step, after waiting over a minute, their site just said they are unavailable, try again later. I wouldn't mind if this happened before starting their archaic login.

It happened to me too at 10:05 this morning. I logged out completely and waited for 10 minutes. Went back in again, it worked.

 

[Gumby]

The site is probably overloaded with all the people waiting until the last minute to buy and secure the current 7.12% rate as well as the 9.62% rate that follows.

 

[Sunset]

The site is probably overloaded with all the people waiting until the last minute to buy and secure the current 7.12% rate as well as the 9.62% rate that follows.

+1
Especially due to all the publicity it has had. Lots of news and other websites mentioning it.

 

[MJ]

The site is probably overloaded with all the people waiting until the last minute to buy and secure the current 7.12% rate as well as the 9.62% rate that follows.

Yeah, I know now. About 5 minutes ago, I was just able to complete 1 transaction fast but 3 minutes later, when I tried to get in for the 2nd transaction, it died so I guess I have to try periodically.

 

[MJ]

Getting additional money to fund Ibonds

I'm sure some people have done this already but I thought I would mention it here. I have a number of CDs earning between 3% to 3.5% which are maturing in late 2023 and early 2024. Currently, the interest is being rolled into the certificate but I realized I can make better use of the interest and move it out and use the money to buy at least one or two more Ibonds as gifts earning higher tax deferred interest.

 

[Born2Fish]

I bought $20k iBonds in late 2021 and $20k in Jan, 2022 - splitting between me and DW TD accounts.

I don't have cash available in ckg but have about $40k cash in my Roth IRA. Thinking about moving $20k to ckg and buying 2023 iBond gifts for us.

Should I try to buy gift iBonds by month end or does it matter?

 

[Dash man]

I Bond Rate May 2022

I bought $20k iBonds in late 2021 and $20k in Jan, 2022 - splitting between me and DW TD accounts.



I don't have cash available in ckg but have about $40k cash in my Roth IRA. Thinking about moving $20k to ckg and buying 2023 iBond gifts for us.



Should I try to buy gift iBonds by month end or does it matter?

You want to move tax free money out of your Roth to buy a taxable investment? You might want to think about that.

If you do, buying by the end of this month gives you the 7.12% for six months , counting this month. If not purchased this month you would get the May 1 rate and whatever rate is set on November 1.

 

[RetiredAndLovingIt]

Not a good idea pulling out of your Roth to use for a taxable investment.

 

[steelyman]

I’ll be interested to learn what the actual (not speculative) May 2022 rate will be.

 

[Gumby]

I’ll be interested to learn what the actual (not speculative) May 2022 rate will be.

The inflation component of the rate is not at all speculative. It is determined by a set formula (CPI-U March 2022/CPI-U September 2021), and it is 9.62% annualized . The fixed component of the rate is discretionary with Treasury. I expect that will stay at zero.

 

[Sunset]

I bought $20k iBonds in late 2021 and $20k in Jan, 2022 - splitting between me and DW TD accounts.

I don't have cash available in ckg but have about $40k cash in my Roth IRA. Thinking about moving $20k to ckg and buying 2023 iBond gifts for us.

Should I try to buy gift iBonds by month end or does it matter?

No.
I would not pull out of a Roth for that.
To me a Roth is very precious, due to all increases being tax free.